Finding New Hirfes Through Employee Referrals
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A proactive approach to recruiting can ease the stress of unexpected turnover. One effective strategy to identify potential new hires is an Employee Referral Program (ERP). An ERP provides a monetary incentive for your current employees to help you find good candidates for future open positions. A well-designed ERP gets your employees to do your recruiting for you.
While you may assume that your employees will refer their friends to you, an ERP will encourage your employees to actively recruit for you. Without an incentive, a current employee may at most forward you the resume of an unemployed friend who asks. An ERP provides employees an incentive to reach out and actively seek applicants for your company.
To create an ERP, you must establish and share the guidelines for your program. Some tips in designing your program:
· The incentive must be worthwhile for the employee. Most employers offer at least $100 and up into the thousands depending on the demand for a position.
· Make it easy for employees to provide referrals. Consider having business cards printed up that your employees can give out to tell referrals how to apply. You can have your employees write their own names on the cards to ensure they receive credit for the referral.
· To emphasize the need to provide qualified applicants, make sure your employees understand the qualifications of any positions you will pay the referral bonus on. Provide employees with written job descriptions.
· Put your ERP policy in writing.
Take time to get your written policy in place before you communicate the program to your employees. Your policy should state:
- The employee must be the first source of the applicant in order to claim the incentive. Make sure that you do not allow an employee to be paid a referral bonus because he or she knows someone in the pile of resumes you received from your recent newspaper advertisement.
- The referral is subject to the same screening process as other applicants. You will not skip the interview just because your employee tells you it is a good candidate.
- Part of the incentive is paid after the new employee’s first day of employment, and the second payment after a designated period of time passes such as six months. You want to ensure that employees are referring applicants for long-term hire. Also, stipulate that both employees must be actively employed at the time of any payment.
Once you have the ERP established, you must promote the program to your employees. Also, change the incentive occasionally so that employees have a reason to start seeking potential applicants again. For example, you could offer a higher incentive during a certain month or for a position you are having particular difficulties filling.
A word of caution, do not rely upon your ERP for all of your hires. If you rely only on your ERP, you could face some challenges in complying with Equal Employment Opportunity laws. An ERP tends to narrow the diversity of your recruitment pool. That is, current employees will tend to primarily refer friends and family that are most likely of the same gender, race or religion. Therefore, if your current workforce is not diverse, relying upon an ERP will only perpetuate your lack of diversity. Even if you find success with your ERP, it is important to continue reaching out to potential employees via other recruitment sources such as advertisements or even just posting “help wanted” signs.
